N/A(Former name, former address and former
fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes [ ] No [ ]

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files)

Yes [ ] No [ ]

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act. (Check one):

Large accelerated filer [ ]

Accelerated filer [ ]

Non-accelerated filer [ ]

Smaller reporting company [X]

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act).

Yes [ ] No [ ]

On November [*], 2012, 27,541,491 shares of the registrant's
common stock were outstanding.

TABLE OF CONTENTS

PART I
 FINANCIAL INFORMATION

Item 1.

Financial Statements

1

Item 2.

Managements
Discussion and Analysis of Financial Condition and Results of Operations

18

Item 3.

Quantitative and Qualitative
Disclosures About Market Risk

25

Item 4.

Controls and
Procedures

25

PART II  OTHER
INFORMATION

Item 1.

Legal Proceedings

26

Item 1A.

Risk Factors

26

Item 2.

Unregistered
Sales of Equity Securities and Use of Proceeds

26

Item 3.

Defaults Upon Senior Securities

26

Item 4.

Mine Safety
Disclosures

26

Item 5.

Other Information

26

Item 6.

Exhibits

26

PART 1 - FINANCIAL INFORMATION

ITEM 1. INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

SHINER INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

September 30,

December 31,

2012

2011

(unaudited)

ASSETS

CURRENT ASSETS:

Cash & equivalents

$

3,592,817

$

2,831,808

Restricted
cash

641,475

57,613

Accounts
receivable, net of allowance for doubtful accounts of $792,893 and
$121,017 at 2012 and 2011

The accompanying notes are an integral part of these
consolidated financial statements.

3

SHINER INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2012 AND 2011 (unaudited)

Note 1 - Organization and Basis of Presentation

The unaudited consolidated financial statements were prepared
by Shiner International, Inc., a Nevada corporation (the Company or Shiner),
pursuant to the rules and regulations of the Securities Exchange Commission
(SEC). The information furnished herein reflects all adjustments (consisting
of normal recurring accruals and adjustments) which are, in the opinion of
management, necessary to fairly present the operating results for the respective
periods. Certain information and footnote disclosures normally present in annual
consolidated financial statements prepared in accordance with accounting
principles generally accepted in the United States of America (US GAAP) were
omitted pursuant to such rules and regulations. These consolidated financial
statements should be read in conjunction with the audited consolidated financial
statements and footnotes included in the Companys Annual Report on Form 10-K.
The results for the nine months ended September 30, 2012, are not necessarily
indicative of the results to be expected for the year ending December 31,
2012.

Organization and Line of Business

Shiner was incorporated in the State of Nevada on November
12, 2003. The Company, through its subsidiaries manufactures Biaxially Oriented
Polypropylene (BOPP) tobacco film, coated films, color printing products,
advanced film, and water based coatings selling to customers throughout China,
Asia, Australia, Europe, the Middle East and North America. Our products are
sold to companies in these industries: food, tobacco, chemical, agribusiness,
medical, pharmaceutical, personal care, electronics, automotive, construction,
graphics, music and video publishing and other consumer goods.

The accompanying consolidated financial statements include the
accounts of Shiner and its subsidiaries as follows:

Subsidiary

Place

Percentage

Parent

Incorporated

Owned

Shiner International, Inc.

Nevada, USA

None

Hainan Shiner

China

100%

Shiner International, Inc.

Shiny-Day

China

100%

Shiner
International, Inc.

Hainan Modern

China

100%

Shiny Day

Zhuhai Modern

China

100%

Shiny Day

Shanghai Junneng

China

70%

Shiner International, Inc.

Shimmer Sun

China

100%

Shiner
International, Inc.

Jingyue

China

100%

Shimmer Sun Ltd.

Shunhao

China

100%

Jingyue

Yongxin

China

100%

Shunhao

Ningbo

China

65%

Yongxin

The accompanying consolidated financial statements were
prepared in conformity with US GAAP. The Companys functional currency is the
Chinese Yuan Renminbi (RMB); however, the accompanying consolidated financial
statements were translated and presented in United States Dollars ($ or
USD).

4

Noncontrolling Interest

On September 20, 2010, the Company commenced operations of a
majority-owned subsidiary, Shanghai Juneng Functional Film Company, Ltd.
(Shanghai Juneng), with Shanghai Shifu Film Material, Co., Ltd., (Shanghai
Shifu). Under the agreement, Shiner owns 70% of Shanghai Juneng, and Shanghai
Shifu owns 30%. The general manager of Shanghai Juneng reports directly to
Shiners Chief Executive Officer. Shanghai Juneng pursues sales opportunities
among Chinas leading food producers in the Yangtze River Delta, one of Chinas
largest economic centers.

On May 2, 2011, Shiner acquired 100% of the stock of Shimmer
Sun Ltd. ("Shimmer") for $3.2 million. The Company paid $1.3 million in cash and
the remaining $1.9 million was recorded as other payables which was paid by
September 30, 2011. The acquisition gave Shiner a 65% controlling interest in
Shimmer's subsidiary, Ningbo Neisuoer Latex Co., Ltd. ("Ningbo"). The
transaction was accounted for under the acquisition method of accounting, with
the purchase price allocated based on the fair value (FV) of the individual
assets acquired and liabilities assumed.

The Company follows Financial Accounting Standards Board
(FASB) Accounting Standards Codification (ASC) Topic 810, Consolidation,
which governs the accounting for and reporting of noncontrolling interests
(NCIs) in partially owned consolidated subsidiaries and the loss of control of
subsidiaries. Certain provisions of this standard indicate, among other things,
that NCIs be treated as a separate component of equity, not as a liability, that
increases and decreases in the parents ownership interest that leave control
intact be treated as equity transactions rather than as step acquisitions or
dilution gains or losses, and that losses of a partially owned consolidated
subsidiary be allocated to the NCI even when such allocation might result in a
deficit balance. This standard also required changes to certain presentation and
disclosure requirements.

The net income (loss) attributed to the NCI is separately
designated in the accompanying statements of operations and other comprehensive
income (loss). Losses attributable to the NCI in a subsidiary may exceed the
NCIs interests in the subsidiarys equity. The excess attributable to the NCI
is attributed to those interests. The NCI shall continue to be attributed its
share of losses even if that attribution results in a deficit NCI balance.

Principles of Consolidation

The accompanying consolidated financial statements include the
accounts of Shiner International, Inc. and its subsidiaries. All significant
intercompany transactions and balances were eliminated in consolidation.

Foreign Currency Translation

The accounts of the Companys Chinese subsidiaries are
maintained in the RMB and the accounts of the U.S. parent company are maintained
in the USD. The accounts of the Chinese subsidiaries are translated into USD in
accordance with ASC Topic 830 Foreign Currency Matters, with the RMB as the
functional currency. According to Topic 830, all assets and liabilities are
translated at the exchange rate on the balance sheet date, stockholders equity
is translated at historical rates and statement of operations items are
translated at the weighted average exchange rate for the period. The resulting
translation adjustments are reported under other comprehensive income in
accordance with ASC Topic 220, Comprehensive Income. Gains and losses
resulting from the translations of foreign currency transactions and balances
are reflected in the statement of operations.

Note 2 - Summary of Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with US
GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.

Cash and Equivalents

Cash and equivalents include cash in hand and cash in time
deposits, certificates of deposit and all highly liquid debt instruments with
original maturities of three months or less.

Restricted Cash

Restricted cash consists of monies restricted by the Companys
lender related to its outstanding debt obligations.

5

Accounts Receivable

The Company maintains reserves for potential credit losses on
accounts receivable. Management reviews the composition of accounts receivable
and analyzes historical bad debts, customer concentrations, customer credit
worthiness, current economic trends and changes in customer payment patterns to
evaluate the adequacy of these reserves. Reserves are recorded primarily on a
specific identification basis.

Advances to Suppliers

To insure a steady supply of raw materials, the Company is
required from time to time to make cash advances when placing its purchase
orders. Management determined that no reserve was necessary for advances to
suppliers. The advances to suppliers are interest free and unsecured.

Inventory

Inventory is valued at the lower of the inventorys cost
(weighted average basis) or the current market price of the inventory.
Management compares the cost of inventory with its market value and an allowance
is made to write down inventory to market value, if lower.

Notes Receivable

Notes receivable consist of bank notes received from customers
as payment of their accounts receivable. The notes are guaranteed by a bank and
bear no interest. The notes are generally due within three months from the date
of issuance.

Property and Equipment

Property and equipment are stated at cost. Expenditures for
maintenance and repairs are expenses as incurred; additions, renewals and
improvements are capitalized. When property and equipment are retired or
otherwise disposed of, the related cost and accumulated depreciation are removed
from the respective accounts, and any gain or loss is included in operations.
Depreciation of property and equipment is provided using the straight-line
method for substantially all assets with estimated lives as follows:

Operating equipment

10 years

Vehicles

8 years

Office equipment

5 years

Buildings and improvements

20 years

The following are the details regarding the Companys property
and equipment at September 30, 2012 and December 31, 2011 (audited):

September 30,

December 31,

2012

2011

Operating equipment

$

25,516,978

$

14,028,345

Vehicles

693,969

801,057

Office equipment

226,613

250,809

Buildings

12,152,745

18,912,102

Building and equipment improvements

-

538,930

38,590,305

34,531,243

Less accumulated depreciation

(7,403,225

)

(6,694,990

)

$

31,187,080

$

27,836,253

Construction in Progress and Government Grants

Construction in progress mainly consists of amounts expended to
build a manufacturing workshop in Hainan and a product line for a BOPP tobacco
line. The costs incurred and capitalized as construction in progress at
September 30, 2012 and December 31, 2011 are $5.3 million and $12.0 million, respectively, which includes
the facility and the equipment. Once the project is completed, the project will
be transferred from Construction in progress to Property and equipment. The
first phase of the project was completed during 2010. The total cost of the new
Hainan manufacturing workshop and the BOPP tobacco line is expected to be $25.1
million. In October 2009, the Company received a government grant for this
project of RMB29.1 million (or $4.3 million based on the exchange rate at
December 31, 2009) from the Hainan Province Finance Bureau (HPFB). The Company
is required to provide detailed expenses of the construction project to the
HPFB. At the end of the project, the government will determine if the funds were
used in accordance with the grant. At September 30, 2012 and December 31, 2011,
respectively, the RMB29.1 million (or $4.5 million based on the exchange rate at
September 30, 2012) government grant was recorded in Other payables on the
accompanying consolidated financial statements (Note 6). If the government
determines the funds were used for their intended purpose, the amount of the
government grant is then amortized into other income over the useful life of the
asset on the same basis used to depreciate the asset.

6

In December 2011, the Company received a government grant of
RMB14 million (or $2.2 million based on the exchange rate of $0.1581 as of
September 30, 2012) from the Haikou Finance Bureau (HFB) for the adjustment
and expansion of our operation and related capital expenditures for construction
and equipment purchase. The Company is required to provide detailed expenses of
the construction project to HFB. At the end of the project, the government will
determine if the funds were used in accordance with the grant. At September 30,
2012 and December 31, 2011, respectively, the grant was recorded in Other
payables on the accompanying consolidated financial statements (Note 6). If the
government determines the funds were used for their intended purpose, the amount
of the government grant is then amortized into other income over the useful life
of the asset on the same basis being used to depreciate the asset.

In Jan 2012, the Company received a government grant of RMB1.8
million (or $0.3 million based on the exchange rate of $0.1581 as of September
30, 2012) from the HFB for the adjustment and expansion of our operation and
related capital expenditures for construction and equipment purchase. The
Company is required to provide detailed expenses of the construction project to
the HFB. At the end of the project, the government will determine if the funds
were used in accordance with the grant. At September 30, 2012, the grant was
recorded in Other payables on the accompanying consolidated financial
statements. If the government determines the funds were used for their intended
purpose, the amount of the government grant is then amortized into other income
over the useful life of the asset on the same basis being used to depreciate the
asset.

Long-Lived Assets

The Company applies ASC Topic 360, Property, Plant, and
Equipment, which addresses financial accounting and reporting for the
impairment or disposal of long-lived assets. ASC 360 requires impairment losses
to be recorded on long-lived assets used in operations when indicators of
impairment are present and the undiscounted cash flows estimated to be generated
by those assets are less than the assets carrying amounts. In that event, a
loss is recognized based on the amount by which the carrying amount exceeds the
FV of the long-lived assets. Loss on long-lived assets to be disposed of is
determined in a similar manner, except that FVs are reduced to recognize the
cost of disposal. Based on its review, the Company believes that as of September
30, 2012 and December 31, 2011, respectively, there was no significant
impairment of its long-lived assets.

Intangible Assets

Intangible assets consist of rights to use three plots of land
in Haikou City granted by the Municipal Administration of China for state-owned
land. For two of these plots, the Companys rights run through January 2059 and,
for the third, the Companys rights run through October 2060. The Company also
acquired a patent with the acquisition of Shimmer that is being amortized over
10 years. The Company evaluates intangible assets for impairment, at least on an
annual basis and whenever events or changes in circumstances indicate the
carrying value may not be recoverable from its estimated future cash flows.
Recoverability of intangible and other long-lived assets is measured by
comparing their net book value to the related projected undiscounted cash flows
from these assets, considering a number of factors including past operating
results, budgets, economic projections, market trends and product development
cycles. If the net book value of the asset exceeds the related undiscounted cash
flows, the asset is considered impaired, and a second test is performed to
measure the amount of impairment loss.

Goodwill

Goodwill is the excess of purchase price over the underlying
net assets of businesses acquired. Under accounting requirements, goodwill is
not amortized but is subject to annual impairment tests, and more frequently if
circumstances dictate. The impairment testing is based on the FV of the
reporting units, which is estimated based on a discounted cash flow valuation
model and the projected future cash flows of the underlying businesses. As of
December 31, 2011 the Company performed the required impairment review which
resulted in no impairment adjustments. The Company did not perform an impairment
test at September 30, 2012.

7

Fair Value of Financial Instruments

For certain of the Companys financial instruments, including
cash and equivalents, restricted cash, accounts receivable, advances to
suppliers, accounts payable, accrued liabilities and short-term debt, the
carrying amounts approximate their FVs due to their short maturities. In
addition, the Company has long-term debt with financial institutions. The
carrying amounts of the line of credit and other long-term liabilities
approximate their FVs based on current rates of interest for instruments with
similar characteristics.

ASC Topic 820, Fair Value Measurements and Disclosures,
requires disclosure of the FV of financial instruments held by the Company. ASC
Topic 825, Financial Instruments, defines FV, and establishes a three-level
valuation hierarchy for disclosures of FV measurement that enhances disclosure
requirements for FV measures. The carrying amounts reported in the consolidated
balance sheets for receivables and current liabilities each qualify as financial
instruments and are a reasonable estimate of their FVs because of the short
period of time between the origination of such instruments and their expected
realization and their current market rate of interest. The three levels of
valuation hierarchy are defined as follows:

Level 1 inputs to the valuation methodology are quoted prices for identical
assets or liabilities in active markets.

Level 2 inputs to the valuation methodology include quoted prices for
similar assets and liabilities in active markets, quoted prices for identical
or similar assets in inactive markets, and inputs that are observable for the
asset or liability, either directly or indirectly, for substantially the full
term of the financial instrument.

Level 3 inputs to the valuation methodology us one or more unobservable
inputs which are significant to the FV measurement.

The Company analyzes all financial instruments with features of
both liabilities and equity under ASC Topic 480, Distinguishing Liabilities
from Equity, and ASC Topic 815, Derivatives and Hedging.

As of September 30, 2012 and December 31, 2011 (audited),
respectively, the Company did not identify any assets and liabilities required
to be presented on the balance sheet at FV.

Revenue Recognition

The Companys revenue recognition policies comply with FASB ASC
Topic 605. Sales revenue is recognized at the date of shipment to customers when
a formal arrangement exists, the price is fixed or determinable, the delivery is
completed, no other significant obligations of the Company exist and
collectability is reasonably assured. Payments received before all of the
relevant criteria for revenue recognition are satisfied are recorded as unearned
revenue.

Sales revenue consists of the invoiced value of goods, which is
net of value-added tax (VAT). All of the Companys products sold in the
Peoples Republic of China (PRC) are subject to Chinese VAT of 17% of the
gross sales price. This VAT may be offset by VAT paid by the Company on raw
materials and other materials included in the cost of producing their end
product. The Company recorded VAT payable and VAT receivable net of payments in
the financial statements. The VAT tax return is filed offsetting the payables
against the receivables.

Sales and purchases are recorded net of VAT collected and paid.
VAT taxes are not affected by the income tax holiday.

Sales returns and allowances was $0 for the nine months ended
September 30, 2012 and 2011. The Company does not provide unconditional right of
return, price protection or any other concessions to its dealers or other
customers.

Other Income

The Company recognizes other income in the period the Company
has earned the revenue and collectability is reasonably assured. Other income in
2011 consists primarily of subsidy income received from Chinese Government
Agencies for developing technology and research and development. The Company
must manage the funds according to government requirements. The Company
recognizes the revenue over the contract period.

Advertising Costs

The Company expenses the cost of advertising as incurred or, as
appropriate, the first time the advertising takes place. Advertising costs for
the three and nine months ended September 30, 2012 and 2011, were not
significant.

8

Research and Development

The Company expenses its research and development (R&D)
costs as incurred. R&D costs included in general and administrative expenses
for the three and nine months ended September 30, 2012 were $766,758 and
$2,103,700, respectively, and $464,445 and $964,080 for the three and nine
months ended September 30, 2011 respectively.

Stock-Based Compensation

The Company records stock-based compensation in accordance with
ASC Topic 718, Compensation  Stock Compensation. ASC Topic 718 requires
companies to measure compensation cost for stock-based employee compensation at
FV at the grant date and recognize the expense over the employees requisite
service period. The Company recognizes in the statement of operations the
grant-date FV of stock options and other equity-based compensation issued to
employees and non-employees. There were 90,000 options outstanding as of
September 30, 2012.

Income Taxes

The Company accounts for income taxes in accordance with ASC
Topic 740, Income Taxes. ASC 740 requires a company to use the asset and
liability method of accounting for income taxes, whereby deferred tax assets are
recognized for deductible temporary differences, and deferred tax liabilities
are recognized for taxable temporary differences. Temporary differences are the
differences between the reported amounts of assets and liabilities and their tax
bases. Deferred tax assets are reduced by a valuation allowance when, in the
opinion of management, it is more likely than not that some portion, or all of,
the deferred tax assets will not be realized. Deferred tax assets and
liabilities are adjusted for the effects of changes in tax laws and rates on the
date of enactment.

Under ASC 740, a tax position is recognized as a benefit only
if it is more likely than not that the tax position would be sustained in a
tax examination, with a tax examination being presumed to occur. The amount
recognized is the largest amount of tax benefit that is more than 50% likely of
being realized on examination. For tax positions not meeting the more likely
than not test, no tax benefit is recorded.

Basic and Diluted Earnings (Loss) Per Share

Earnings (loss) per share is calculated in accordance with the
ASC Topic 260, Earnings Per Share. Basic earnings per share (EPS) is based
upon the weighted average number of common shares outstanding. Diluted EPS is
based on the assumption that all dilutive convertible shares and stock warrants
were converted or exercised. Dilution is computed by applying the treasury stock
method. Under this method, warrants are assumed to be exercised at the beginning
of the period (or at the time of issuance, if later), and as if funds obtained
thereby were used to purchase common stock at the average market price during
the period. There were 90,000 options and 521,664 warrants outstanding as of
September 30, 2012 with weighted-average exercise prices of $0.95 and $1.70,
respectively. All options and warrants were excluded from the diluted loss per
share for the nine months ended September 30, 2012 due to the dilutive effect.
The following is a reconciliation of the number of shares (denominator) used in
the basic and diluted EPS computations for three and nine months ended September
30, 2012 and 2011:

Three Months Ended September 30,

2012

2011

Per Share

Per Share

Shares

Amount

Shares

Amount

Basic earnings per share

27,541,491

$

(0.13

)

27,541,491

$

0.01

Effect of dilutive stock options and warrants

-

-

-

-

Diluted earnings per share

27,541,491

$

(0.13

)

27,541,491

$

0.01

Nine Months Ended September 30,

2012

2011

Per Share

Per Share

Shares

Amount

Shares

Amount

Basic earnings per share

27,541,491

$

(0.20

)

27,541,491

$

0.08

Effect of dilutive stock options and warrants

-

-

-

-

Diluted earnings per share

27,541,491

$

(0.20

)

27,541,491

$

0.08

9

Foreign Currency Transactions and Comprehensive Income

US GAAP generally requires recognized revenue, expenses, gains
and losses be included in net income. Certain statements, however, require
entities to report specific changes in assets and liabilities, such as gain or
loss on foreign currency translation, as a separate component of the equity
section of the balance sheet. Such items, along with net income, are components
of comprehensive income. The functional currency of the Companys Chinese
subsidiaries is the RMB. Translation gains of $5,648,859 and $5,426,393
(audited) at September 30, 2012 and December 31, 2011, respectively, are
classified as an item of other comprehensive income in the stockholders equity
section of the consolidated balance sheets.

Statement of Cash Flows

In accordance with ASC Topic 230, Statement of Cash Flows,
cash flows from the Companys operations are calculated based upon the local
currencies using the average translation rates. As a result, amounts related to
assets and liabilities reported on the consolidated statements of cash flows
will not necessarily agree with changes in the corresponding balances on the
consolidated balance sheets.

Segment Reporting

ASC Topic 280, Segment Reporting, requires use of the
management approach model for segment reporting. The management approach model
is based on the way a companys management organizes segments within the company
for making operating decisions and assessing performance. The Company determined
it has five reportable segments. See Note 14.

Dividends

The Company's Chinese subsidiaries have restrictions on the
payment of dividends to the Company. China has currency and capital transfer
regulations that may require the Company's Chinese subsidiaries to comply with
complex regulations for the movement of capital. These regulations include a
public notice issued in October 2005 by the State Administration of Foreign
Exchange (SAFE) requiring PRC residents, including both legal and natural
persons, to register with the competent local SAFE branch before establishing or
controlling any company outside of China. Although the Company believes its
Chinese subsidiaries are in compliance with these regulations, should these
regulations or the interpretation of them by courts or regulatory agencies
change, the Company may not be able to pay dividends outside of China.

Recent Accounting Pronouncements

In May 2011, the FASB issued ASU 2011-04 to provide a
consistent definition of FV and ensure the FV measurement and disclosure
requirements are similar between US GAAP and IFRS. ASU 2011-04 changes certain
FV measurement principles and enhances the disclosure requirements particularly
for Level 3 FV measurements. This guidance was effective for the Company on
January 1, 2012. The adoption of ASU 2011-04 did not have a significant impact
the Companys consolidated financial statements.

In June 2011, the FASB issued ASU 2011-05, Presentation of
Comprehensive Income. ASU 2011-05 revises the manner in which entities
present comprehensive income in their financial statements. The new guidance
removes the presentation options in Accounting Standards Codification (ASC) 220,
Comprehensive Income, and requires entities to report components of
comprehensive income in either (1) a continuous statement of comprehensive
income or (2) two separate but consecutive statements. The new guidance does not
change the items that must be reported in other comprehensive income. In
December 2011, the FASB issued ASU 2011-12 which defers the requirement in ASU
2011-05 that companies present reclassification adjustments for each component
of accumulated other comprehensive income in both net income and other
comprehensive income on the face of the financial statements. ASU 2011-05 is
effective for fiscal years and interim reporting periods within those years
beginning after December 15, 2011, with early adoption permitted. The adoption
of ASU 2011-05, as amended by ASU 2011-12, did not have a significant impact the
Companys consolidated financial statements.

In September 2011, the FASB issued ASU 2011-08 which provides
an entity the option to first assess qualitative factors to determine whether it
is necessary to perform the two-step test for goodwill impairment. If an entity
believes, as a result of its qualitative assessment, that it is
more-likely-than-not the FV of a reporting unit is less than its carrying
amount, the quantitative impairment test is required. Otherwise, no further
testing is required. The revised standard is effective for the Company for its
annual and interim goodwill impairment tests performed for fiscal years beginning
after December 15, 2011. The adoption of ASU 2011-08 did not significantly
impact the Companys consolidated financial statements.

10

In July 2012, the FASB issued ASU 2012-02, Intangibles-Goodwill
and Other (Topic 350) - Testing Indefinite-Lived Intangible Assets for
Impairment. The ASU provides entities with an option to first assess qualitative
factors to determine whether events or circumstances indicate it is more likely
than not the indefinite-lived intangible asset is impaired. If an entity
concludes it is more than 50% likely that an indefinite-lived intangible asset
is not impaired, no further analysis is required. However, if an entity
concludes otherwise, it would be required to determine the FV of the
indefinite-lived intangible asset to measure the amount of impairment, if any,
as currently required under US GAAP. The ASU is effective for annual and interim
impairment tests performed for fiscal years beginning after September 15, 2012.
Early adoption is permitted. The adoption of this pronouncement will not have a
material impact on our financial statements.

Note 3  Advances to Suppliers

Advances to suppliers represent prepayment to vendors for the
purchases of inventory.

Note 4 - Inventory

Inventory at September 30, 2012 and December 31, 2011(audited),
respectively, consisted of the following:

September 30,

December 31,

2012

2011

Raw material

$

3,958,907

$

4,093,316

Work in process

1,152,193

1,724,754

Finished goods

6,431,186

4,781,927

11,542,286

10,599,997

Less: Obsolescence reserve

(369,964

)

(347,042

)

$

11,172,322

$

10,252,955

Note 5 - Intangible Assets

Intangible assets at September 30, 2012 and December 31,
2011(audited), respectively, consisted of the following:

September 30,

December 31,

2012

2011

Patent

$

2,131,131

$

2,120,348

Right to use land

1,159,301

1,153,434

Less: Accumulated amortization

(388,202

)

(210,136

)

Intangible assets, net

$

2,902,230

$

3,063,646

Pursuant to the regulations, the PRC government owns all land.
The Company has recognized the amounts paid for the acquisition of rights to use
land as an intangible asset and amortizing such rights over the period the
Company has use of the land, which range from 54 to 57 years.

Note 6  Other Payables

Other payables at September 30, 2012 and December 31,
2011(audited), respectively, consisted of the following:

September 30,

December 31,

2012

2011

Special purpose fund for Shi Zi Ling
workshop

$

4,447,353

$

4,577,430

Special purpose fund for structure and equipment

2,139,620

2,202,200

Miscellaneous payables

569,708

241,549

$

7,156,681

$

7,021,179

11

The $4,447,353 and $2,139,620 payables at September 30, 2012
are liabilities recorded pursuant to the funds received as part of government
grants. See Construction in Progress and Government Grants in Note 2.

Note 7 - Debt

Short-term loans at September 30, 2012 and December 31,
2011(audited), respectively, consisted of the following:

September 30,

December 31,

2012

2011

From February 28, 2011 to February 28,
2012, with interest of 6.06% at December 31, 2011. The loan was
collateralized by equipment

$

-

$

4,247,100

From March 16, 2012 to February 18, 2013,
with interest of 8.53% at September 30, 2012. The loan is collateralized
by equipment

1,581,000

-

From June 19, 2012 to June 19, 2013, with
interest of 8.20% at September 30, 2012. The loan is collateralized by
equipment

2,371,500

-

From June 8, 2012 to June 7, 2013, with
interest rate 7.26% at September 30, 2012. The loan is collateralized by
equipment

4,268,700

-

From June 30, 2011 to September 30, 2012,
with interest of 8.203% at September 30, 2012. The loan was collateralized
by buildings and equipment

-

1,573,000

Various short-term loans payable to bank,
with interest ranging from 3.21% to 6.41%. The loans were due through
September 28, 2012 and were collateralized by accounts receivable

-

2,795,039

Various bank acceptance bills payable
through January 24, 2013

2,267,796

2,069,486

From August 28, 2012 to November 24, 2012,
with interest of 7.28% at September 30, 2012. The loan is collateralized
by a letter of credit

2,086,920

-

From September 10, 2012 to March 10, 2013,
with interest of 6.16% at September 30, 2012. The loan is collateralized
by a building and equipment

790,500

-

$

13,366,416

$

10,684,625

12

Long-term loans at September 30, 2012 and December 31, 2011
(audited), respectively, consisted of the following:

September 30,

December 31,

2012

2011

From January 24, 2011 to
January 24, 2018, with interest of 6.60% . The loan is collateralized
by buildings and land use rights

$

2,529,600

$

2,516,800

From February 10, 2011
to February 10, 2018, with interest of 6.60%. The loan is
collateralized by buildings and land use rights

2,845,800

2,831,400

From February 16, 2011 to February 16,
2018, with interest of 6.60%. The loan is collateralized by buildings
and land use rights

2,292,450

2,280,850

From February 17, 2011 to February 17,
2018, with interest of 6.60%. The loan is collateralized by buildings
and land use rights

1,248,990

1,242,670

From March 25, 2011 to March 25, 2018, with
interest of 6.60%. The loan is collateralized by buildings and land
use rights

426,870

424,710

From November 30, 2011 to November 30,
2018, with interest of 6.60%. The loan is collateralized by buildings
and land use rights

158,100

157,300

From December 23, 2011 to December 23,
2018, with interest of 6.60%. The loan is collateralized by buildings
and land use rights

505,920

503,360

From March 19, 2012 to January 18, 2018,
with interest of 6.60%. The loan is collateralized by buildings and
land use rights

1,059,270

-

$

11,067,000

$

9,957,090

Aggregate future maturities of long-term loans at September 30,
2012 are as follows:

Year ending December 31,

2013

$

-

2014

-

2015

-

2016

-

2017

-

Thereafter

11,067,000

$

11,067,000

On August 2, 2010, Hainan Shiner Industrial Co., Ltd. (Hainan
Shiner), the Companys wholly owned subsidiary, entered into a credit facility
with the Hainan Branch of the Bank of China. The credit facility is a secured
revolving credit facility in an aggregate of RMB70 million (or approximately
$11.1 million based on the exchange rate on December 31, 2010) for seven years.
Under the credit facility arrangement, Hainan Shiner may only use the loan
proceeds to improve the technology of its BOPP film and to purchase certain
equipment necessary for the improvement. Proceeds under the facility not used
for these purposes would be subject to a misappropriation penalty interest rate
that is 100% of the current interest rate on the loan.

The initial interest rate on each withdrawal from the facility
will be the 5-year benchmark lending rate announced by the Peoples Bank of
China on the date of such withdrawal, and is subject to adjustment every 12
months based upon the benchmark. Additional interest will be paid on an overdue
loan under this credit facility of 50% of the current interest rate on the loan.
Hainan Shiner and certain of its affiliates, including the Company, have
provided guarantees and certain land, buildings, and property as collateral
under this facility.

The credit facility includes covenants that prohibit Hainan
Shiner from making distributions to the Company, its sole shareholder, if (a)
its after-tax net income for the fiscal year is zero or negative, (b) its
after-tax net income is insufficient to make up its accumulated loss, (c) its
income before tax is not utilized in paying off the capital, interest and
expense of the lender, or (d) its income before tax is insufficient to pay the
capital, interest and expense of the lender.

As of September 30, 2012, the Company drew down the entire
RMB70 million credit facility.

13

Note 8 - Stock Options and Warrants

Stock Options

The following is a summary of the Companys stock option
activity for the nine months ended September 30, 2012:

Weighted

Average

Aggregate

Options

Exercise Price

Intrinsic

Outstanding

Price

Value

Outstanding at December 31, 2011

120,000

1.03

Granted

-

-

Canceled/Expired

(30,000

)

1.25

Exercised

-

-

Outstanding at September 30, 2012

90,000

$

0.95

$

-

Exercisable at September 30, 2012

70,000

$

0.99

$

-

The number and weighted average exercise prices of all options
outstanding as of September 30, 2012, are as follows:

Options Outstanding

Weighted

Weighted

Average

Number

Average

Remaining

Range of

Outstanding

Exercise

Contractual Life

Exercise Price

September 30, 2012

Price

(Years)

$ 0.80

60,000

$

0.80

4.19

1.25

30,000

$

1.25

1.68

90,000

The number and weighted average exercise prices of all options
exercisable as of September 30, 2012, are as follows:

Options Exercisable

Weighted

Weighted

Average

Number

Average

Remaining

Range of

Outstanding

Exercise

Contractual Life

Exercise Price

September 30, 2012

Price

(Years)

$ 0.80

40,000

$

0.80

4.19

1.25

30,000

$

1.25

1.68

70,000

Warrants

The following is a summary of the Companys warrant activity
for the nine months ended September 30, 2012:

Weighted

Weighted

Average

Average

Remaining

Warrants

Exercise Price

Contractual Life

Outstanding

Price

(Years)

Outstanding at December 31, 2011

521,664

1.70

Granted

-

-

Canceled

-

-

Exercised

-

-

Outstanding at September 30,
2012

521,664

$

1.70

0.49

Exercisable at September 30, 2012

521,664

$

1.70

0.49

14

Note 9 - Employee Welfare Plans

The expense for employee common welfare was $7,599 and $50,404
for the three and nine months ended September 30, 2012, respectively, and
$41,544 and $133,859 for the three and nine months ended September 30, 2011,
respectively.

Note 10 - Statutory Common Welfare Fund

As stipulated by the Company Law of the PRC, net income after
taxation can only be distributed as dividends after appropriation has been made
for the following:

i.

Making up cumulative prior years losses, if
any;

ii.

Allocations to the statutory surplus reserve of at
least 10% of income after tax, as determined under PRC accounting rules
and regulations, until the reserve reaches 50% of the Companys registered
capital;

iii.

Allocations of 5% to 10% of income after tax, as
determined under PRC accounting rules and regulations, to the Companys
statutory common welfare fund, which is established for the purpose of
providing employee facilities and other collective benefits to the
Companys employees; and

iv.

Allocations to the discretionary surplus reserve, if
approved in the stockholders general meeting.

The Company appropriated $0 and $360,722 as reserve for the
statutory surplus reserve and statutory common welfare fund for the nine months
ended September 30, 2012 and 2011, respectively.

Note 11 - Current Vulnerability Due to Certain
Concentrations

Two customers accounted for 5% and 4%, respectively, of the
Companys sales for the nine months ended September 30, 2012.

There were no customers that exceeded 10% of the Companys
sales for the three or nine months ended September 30, 2011.

One vendor provided 15% of the Companys raw materials for the
nine months ended September 30, 2012, there was no vendor which accounted for
10% or more of the Companys raw material purchases for the three and nine
months ended September 30, 2011.

The Companys operations are carried out in the PRC.
Accordingly, the Companys business, financial condition and results of
operations may be influenced by the political, economic and legal environments
in the PRC and by the general state of the PRCs economy. The Companys business
may be influenced by changes in governmental policies with respect to laws and
regulations, anti-inflationary measures, currency conversion and remittance
abroad, and rates and methods of taxation, among other things.

Note 12  Commitments and Contingencies

At September 30, 2012, the Company is contingently liable to
banks for discounted notes receivable and to vendors for endorsed notes
receivable of $776,395.

Note 13  Segment Information

The Company has five segments: BOPP tobacco films, water-based
latex, coated film, color printed packaging, and advanced film. The water-based
latex is one of the raw materials used in coated film to make the packaging more
environmental friendly and the barrier property better. Approximately 70% of the
water-base latex products manufactured by Ningbo are sold to Hainan Shiner,
Hainan Shiny-day and Zhuhai Huanuo.

15

The following tables summarize the Companys segment
information for the three and nine months ended September 30, 2012 and 2011:

Three Months
Ended September 30,

Nine Months
Ended September 30,

2012

2011

2012

2011

Revenues from unrelated entities

Tobacco film

$

10,355,542

$

7,144,354

$

30,990,541

$

22,829,240

Water-based latex

1,689

119,636

294,499

293,073

Coated film

3,717,094

6,931,047

11,609,264

18,749,972

Color printing

1,018,844

1,428,615

2,435,323

4,557,557

Advanced film

1,613,439

2,988,197

5,148,490

5,956,079

$

16,706,608

$

18,611,849

$

50,478,117

$

52,385,921

Intersegment revenues

Tobacco film

$

5,123,093

$

3,843,162

$

14,890,567

$

7,720,336

Water-based latex

288,488

440,243

457,436

659,140

Coated film

1,842,386

522,237

5,578,106

2,292,834

Color printing

499,660

255,043

1,170,143

1,204,568

Advanced film

800,486

-

2,473,785

-

$

8,554,113

$

5,060,685

$

24,570,037

$

11,876,878

Total Revenues

Tobacco film

$

15,478,635

$

10,987,516

$

45,881,108

$

30,549,576

Water-based latex

290,177

559,879

751,935

952,213

Coated film

5,559,480

7,453,284

17,187,370

21,042,806

Color printing

1,518,504

1,683,658

3,605,466

5,762,125

Advanced film

2,413,925

2,988,197

7,622,275

5,956,079

Less Intersegment revenues

(8,554,113

)

(5,060,685

)

(24,570,037

)

(11,876,878

)

$

16,706,608

$

18,611,849

$

50,478,117

$

52,385,921

Income (loss) from operations

Tobacco film

$

(611,087

)

$

667,999

$

(1,364,197

)

$

2,879,859

Water-based latex

(2,394

)

97,523

58,119

109,079

Coated film

(254,277

)

(217,401

)

(809,033

)

440,344

Color printing

(175,401

)

(54,347

)

(445,333

)

(344,441

)

Advanced film

(16,965

)

(44,761

)

(82,007

)

35,832

Holding Company

(10,607

)

(119,838

)

(34,806

)

(281,924

)

$

(1,070,731

)

$

329,175

$

(2,677,257

)

$

2,838,749

Interest income

Tobacco film

$

10,394

$

(50

)

$

21,633

$

3,860

Water-based latex

46

(1,037

)

205

50

Coated film

3,805

1,390

8,104

3,261

Color printing

928

8

1,700

742

Advanced film

1,669

195

3,594

1,012

Holding Company

-

1,947

-

1,992

$

16,842

$

2,453

$

35,236

$

10,917

Interest Expense

Tobacco film

$

283,983

$

108,225

$

652,827

$

431,125

Water-based latex

2,954

-

6,791

-

Coated film

112,643

105,201

258,947

163,108

Color printing

22,791

27,613

52,392

44,518

Advanced film

47,683

34,356

109,616

50,924

Holding Company

668

-

2,014

-

$

470,722

$

275,395

$

1,082,587

$

689,675

16

Income tax expense (benefit)

Tobacco
film

$

(4,697

)

$

(46,954

)

$

4,577

$

276,591

Water-based latex

-

9,382

-

11,836

Coated film

(2,301

)

182,634

2,152

278,084

Color printing

-

-

-

-

Advanced
film

(1,040

)

74,832

954

86,621

Holding Company

-

-

-

-

$

(8,038

)

$

219,894

$

7,683

$

653,132

Net Income (loss)

Tobacco film

$

(2,078,652

)

$

514,511

$

(3,052,988

)

$

2,219,046

Water-based
latex

(5,302

)

74,834

51,534

83,726

Coated film

(925,934

)

(10,592

)

(1,557,217

)

495,223

Color
printing

(197,264

)

(81,138

)

(496,025

)

(387,403

)

Advanced film

(312,870

)

5,987

(408,591

)

57,832

Holding
Company

(11,275

)

(120,536

)

(36,820

)

(280,983

)

$

(3,531,297

)

$

383,066

$

(5,500,107

)

$

2,187,441

Provision for depreciation

Tobacco
film

$

431,846

$

190,909

$

1,424,466

$

687,538

Water-based latex

10,559

29,691

32,005

31,743

Coated film

171,295

210,118

565,022

632,198

Color printing

34,658

51,135

114,320

172,550

Advanced
film

72,511

88,367

239,182

197,377

Holding Company

-

-

-

-

$

720,869

$

570,220

$

2,374,995

$

1,721,406

As of

As of

September 30,

December 31,

2012

2011

Total Assets

(audited)

Tobacco film

$

38,454,298

$

31,239,495

Water-based
latex

746,093

797,500

Coated film

15,253,086

20,810,552

Color
printing

3,086,143

5,768,795

Advanced film

6,456,855

7,470,573

Holding
Company

11,504,893

11,646,065

$

75,501,368

$

77,732,980

17

ITEM 2.

MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OFOPERATIONS

Special Note Regarding Forward Looking Statements

In addition to historical information, this report contains
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. We use words such as believe, expect, anticipate, project,
target, plan, optimistic, intend, aim, will or similar expressions
which are intended to identify forward-looking statements. Such statements
include, among others, those concerning market and industry segment growth and
demand and acceptance of new and existing products; any projections of sales,
earnings, revenue, margins or other financial items; any statements of the
plans, strategies and objectives of management for future operations; and any
statements regarding future economic conditions or performance, as well as all
assumptions, expectations, predictions, intentions or beliefs about future
events. You are cautioned that any such forward-looking statements are not
guarantees of future performance and involve risks and uncertainties, as well as
assumptions, which, if they were to ever materialize or prove incorrect, could
cause the results of the Company to differ materially from those expressed or
implied by such forward-looking statements. Potential risks and uncertainties
include, among other things, the factors discussed in Item 1A, Risk Factors
included in the Company annual report on Form 10-K filed on April 12, 2012.

Because the factors discussed in this report could cause our
actual results or outcomes to differ materially from those expressed in any
forward-looking statement made by us or on our behalf, you should not place
undue reliance on any such forward-looking statement. Further, any
forward-looking statement speaks only as of the date on which it is made, and we
undertake no obligation to update any forward-looking statement or statements to
reflect events or circumstances after the date on which such statement is made
or to reflect the occurrence of unanticipated events, except as required by law.
New factors emerge from time to time, and it is not possible for us to predict
which will arise. In addition, we cannot assess the impact of each factor on our
business or the extent to which any factor, or combination of factors, may cause
actual results to differ materially from those contained in any forward-looking
statement.

Use of Terms

Except as otherwise indicated by the context, all references in
this report to:

Securities Act are to the Securities Act of 1933, as amended; and
Exchange Act are to the Securities Exchange Act of 1934, as amended;

RMB are to Renminbi, the legal currency of China; and U.S. dollar,
USD, US$ and $ are to the legal currency of the United States;

China, Chinese and PRC are to the Peoples Republic of China; and

BVI are to the British Virgin Islands.

Overview

We were incorporated in Nevada in November 2003, but since July
2007, have been headquartered in Hainan, China. Through our operating
subsidiaries, Hainan Shiner, Shiny-Day, Hainan Modern, Zhuhai Modern, Shimmer
Sun, Ningbo and Shanghai Juneng we manufacture and sell packaging and
anti-counterfeit plastic film to manufacturers and producers in China. We sell
anti-counterfeit film, coated film, and color printing, in international markets
through a network of distributors and converters.

Our primary business consists of the manufacture and
distribution of technology driven advanced packaging film products in five
business segments: bi-axially oriented polypropylene, or BOPP, film for wrapping
tobacco; water-based latex; coated film; color printed packaging; and advanced
film. Our products are sold to customers in the food, tobacco, chemical, medical
and pharmaceutical, personal care, electronics, automotive, construction,
graphics, music and video publishing industries. Our current production capacity consists of: five coated film lines with a capacity of 15,000
tons a year; two BOPP tobacco film production lines with a capacity of 13,500
tons a year; one BOPP film production line with a capacity of 7,000 tons a year;
three color printing lines; four anti-counterfeit film lines with a capacity of
2,500 tons a year; and two water-based latex reaction kettles with a capacity of
3,000 tons a year.

18

The table below shows the percentage of revenue by each of our
business segments for the nine months ended September 30, 2012 and 2011:

Percent of Revenue

Nine Months Ended September 30,

Three Months Ended September 30,

2012

2011

2012

2011

BOPP tobacco film

62.0%

38.4%

61.4%

43.6%

Water-based latex

0.0%

0.6%

0.6%

0.6%

Coated film

22.2%

37.2%

23.0%

35.8%

Color printing

6.1%

7.7%

4.8%

8.7%

Advanced film

9.7%

16.1%

10.2%

11.3%

100.0%

100.0%

100.0%

100.0%

We have 21 patents issued by the State Intellectual Property
Office of China and have 22 patent applications relating to our products and
manufacturing processes pending. Although our patents and processes provide us a
competitive advantage, we do not believe the loss of any single patent would
have a material adverse effect on our business.

Revenues for the three months ended September 30, 2012
decreased $1.9 million (or 10.2%), to $16.7 million compared to $18.6 million
for the corresponding period in 2011. The decrease was primarily attributable to
decreased revenues from coated film, color
printing advanced film and water-based latex, which was partially offset by increase in revenues generated from BOPP tobacco. For the three months ended September 30, 2012, revenue from coated film revenue decreased $3.2 million (or 46.4%) to
$3.7 million from $6.9 million for the corresponding period in 2011, and sales from color printing decreased $0.4 million (or 28.7%) to $1.0 million from $1.4 million for the corresponding period in 2011. For the three months
ended September 30, 2012, revenue from BOPP tobacco increased $3.2 million (or 45.0%) to $10.3 million from $7.1 million for the corresponding period in 2011; revenue from advanced film decreased $1.4 million (or 46.0%) to $1.6
million from $3.0 million for the corresponding period in 2011; and revenue from water-based latex decreased $0.1 million (or 98.6%) to $0.01 million from $0.1 million for the corresponding period in 2011.

We sell or products both domestically and internationally. Our international sales are indirect sales through distributors and converters. For the three months ended in September 30, 2012, the division between our domestic and international sales
remained substantially stable, as compared to the corresponding period in 2011. For the three months ended in September 30, 2012 and September 30, 2011, sales generated domestically accounted for 85.1% and 81.8%, respectively, of our total revenues
for that period, and sales generated internationally from selling our advanced, coated film, and color printing, accounted for 14.9% and 18.2%, respectively, of our total revenues for that period.

Cost of Goods Sold

Cost of goods sold (COGS) for the three months ended September 30, 2012 decreased $1.2 million (or 7.5%) from $16.5 million to $15.3 million for the corresponding period in 2011. The COGS was 91.3% and 88.6% of our revenue
for the three months ended September 30, 2012 and 2011, respectively. The principal cost component of our COGS is raw materials which includes petroleum. The increase in COGS year to year was primarily caused by an increase in raw material costs due
to petroleum price fluctuations, an increase in the cost of labor, and the amortization of the added depreciation of Phase I of the Hainan manufacturing facility into the COGS. We estimate an increase in the price of crude oil of $10 per barrel
would cause our raw material cost to increase by approximately 6%. There was some increase in the cost of our raw materials as a result of an increase in crude oil prices throughout the period. There has not been a significant difference in the COGS
percentages among our different product lines and therefore, any increase or decrease in our raw material costs would be expected to have a similar impact to our different product lines profitability.

Packaging industry standards mandate the use of non-benzene based packaging products for food packaging. To be environmentally friendly and to improve work conditions in our factory, Shiner switched to non-benzene based ink products. This change
also contributed to our compliance with the food safety laws, as our food packaging operations are conducted in the same facility. We had favorable feedback from all of our customers at the time.

Gross Profit

Our gross profit for the three months ended September 30, 2012 was $1.5 million, a profit margin of 8.7%, a decrease of 2.7% from 11.4% for the corresponding period in 2011. The decrease in profit margin was primarily a consequence of an
increase in labor costs and depreciation of new property.

Selling, General and Administrative Expenses

Our selling, general and administrative expenses for the three months ended September 30, 2012 increased by 40.6%, or $.7 million, to $2.5 million in 2012 compared to $1.8 million for the corresponding period in 2011. General and
administrative (G&A) expenses include rent, management and staff salaries, insurance, marketing, accounting, legal, and research and development expenses (R&D expenses). Although we have strict standards to control
our G&A expenses, we increased our R&D expenditures as compared to 2011. The increase in selling, general and administrative expenses was mainly due to a $0.3 million increase in R&D expense and a $0.7 million increase in bad
debt allowance.

Loss on Sale and Write-off of Assets

During the three months ended September 30, 2012, we sold
certain machinery and equipment used by our Zhuhai subsidiary, for a loss of
$1,510,215, and wrote off the value of other assets by $596,164.

Interest Expense, net

Interest expense increased by 66.3%, or $180,938, to $453,880 in the three months ended September 30, 2012 compared to $272,942 in the corresponding period of 2011, primarily due to additional short-term and long-term loans.

Other Income

Other income decreased by $459,277 or 84.2% to $86,140 for the three months ended September 30, 2012 compared to $545,417 in the corresponding period of 2011. During the three months ended September 30, 2011, we received $604,000 in
subsidy income from Chinese Governmental Agencies for developing technology and R&D projects. We did not have these subsidies during the corresponding period of 2012.

20

Income Tax Expense

For the three months ended September 30, 2012, we recorded a
tax benefit of $8,038 compared to a provision of $219,894 for the corresponding
period of 2011. Our effective tax rates for 2012 and 2011 were 0% and 36%,
respectively. The increase in the effective tax rate is due to losses incurred
by certain subsidiaries where the loss was not able to offset income generated
by other subsidiaries.

Net Income

The decrease in our net income for the three months ended
September 30, 2012 compared to the corresponding period of 2011 was mainly due
to increased labor costs, depreciation of the new property.

Comparison of the Nine Months Ended September 30, 2012
and 2011

Nine months ended

$

%

September 30,

2012

2011

Change

Change

Revenues

$

50,478,117

52,385,921

$

(1,907,804

)

-3.6%

Cost of goods sold

46,370,015

45,378,458

991,557

2.2%

Gross profit

4,108,102

7,007,463

(2,899,361

)

-41.4%

Selling, general and administrative expenses

6,785,359

4,168,714

2,616,645

62.8%

Loss on sale and write off of assets

2,106,379

-

2,106,379

N/A

Interest expense, net of interest income

1,047,351

678,758

368,593

54.3%

Other income (expense), net

279,669

617,250

(337,581

)

-54.7%

Exchange gain (loss)

(22,083

)

61,996

(84,079

)

-135.6%

Income tax expense

7,683

653,132

(645,449

)

-98.8%

Net loss attributed to noncontrolling interest

80,977

1,336

79,641

5961.2%

Net income (loss) attributed to Shiner

$

(5,500,107

)

$

2,187,441

$

(7,687,548

)

-351.4%

Revenues

Revenues for the nine months ended September 30, 2012 decreased
$1.9 million (or 3.6%), to $50.5 million compared to $52.4 million for the
corresponding period in 2011. The decrease was primarily attributable to
decreased revenues generated from coated film, color printing and advanced film,
which was partially offset by increase in revenues generated from BOPP tobacco
and water-based latex. For the nine months ended September 30, 2012, there was a
$8.2 million (or 35.8%) increase in sales from tobacco film and water-based
latex (0.5% increase), which, however, was offset by significant decrease in
sales from coated film (38.1% decrease), color printing (46.6% decrease) and
advanced film (13.6% decrease) as compared to the sales for the corresponding
period of 2011. For the nine month ended September 30, 2012 as compared to the
corresponding period in 2011, revenue from advanced film decreased $0.8 million
(or 13.6%) to $5.1 million, down from $5.9 million, revenue from BOPP tobacco
increased $8.2 million (or 35.8%) to $31.0 million from $22.8 million, and
revenue from water based latex increased $0.01 million (or 0.5%) to $0.3 million
from $0.3 million. For the nine month ended September 30, 2012 as compared to
the corresponding period in 2011, revenue from
coated film decreased $7.1 million (or 38.1%) to $11.6 million from $18.8 million, and revenue from color printing decreased $2.1 million (or 46.6%) to $2.4 million from $4.5 million.

21

For the nine months ended in September 30, 2012, the division between our domestic and international sales remained stable compared to the corresponding period in 2011. For the nine months ended in September 30, 2012 and September 30, 2011, sales
generated domestically accounted for 83.5% and 82.9%, respectively, of our total revenues for that period, and sales generated internationally from selling our advanced film, coated film, and color printing accounted for 16.5% and 17.1%,
respectively, of our total revenues for that period.

Cost of Goods Sold

For the nine months ended September 30, 2012 compared to the corresponding period in 2011, COGS increased $1.0 million (or 2.2%) from $45.4 million to $46.4 million. The COGS for the nine months ended September 30, 2012 and 2011
accounted for 91.9% and 86.6% of our revenues for the corresponding period, respectively. As explained above, the increase in COGS was primarily caused by an increase in raw material costs due to petroleum price fluctuations, cost of labor, and the
amortization of the added depreciation of Phase I of the Hainan manufacturing facility into the COGS.

Gross Profit

Our gross profit for the nine months ended September 30, 2012 was $4.1 million, a profit margin of 8.1%, a decrease of 5.2% from 13.4% for the corresponding period in 2011. The decrease in profit margin was primarily a consequence of an increase
our COGS as a result of increase in raw material costs, labor costs and depreciation of the new property.

Selling, General and Administrative Expenses

For the nine months ended September 30, 2012, our selling, G&A expenses increased by $2.6 million (or 62.8%) to $6.8 million compared to $4.2 million for the corresponding period in 2011. G&A expenses include rent, management and
staff salaries, insurance, marketing, accounting, legal, and R&D expenses. Although we have strict standards to control our G&A expenses, we increased our R&D expenditures as compared to 2011. The increase in selling, general and
administrative expenses was mainly due to an increase of $1.1 million in R&D expenses, an increase of $0.6 million in marketing expenses, and an increase of $0.7 million in bad debt provision.

Loss on Sale and Write-off of Assets

During the nine months ended September 30, 2012, we sold certain subsidiary assets for a loss of $1,510,215 and wrote off the value of other assets by $596,164.

Interest Expense, net

Interest expense increased by $368,593 (or 54.3%) to $1,047,351 for the nine months ended September 30, 2012 as compared to $678,758 for the same period in 2011, primarily due to additional short-term and long-term loans, which have
increased by approximately $3.7 million in 2012.

Other Income

Other income decreased by $337,581 (54.7%) to 279,669 for the nine months ended September 30, 2012 as compared to income of $617,250 for the corresponding period in 2011. During the nine months ended September 30, 2011, we received
$759,000 in subsidy income from PRC governmental agencies for developing technology and R&D projects. We did not receive these subsidies during the 2012 period.

Income Tax Expense

For the nine months ended September 30, 2012, we recorded a tax provision of $7,683 compared to $653,132 for the corresponding period in 2011. Our effective tax rates for 2012 and 2011 were 0.1% and 23%, respectively. The decrease in the
effective tax rate was due to losses incurred by certain subsidiaries.

22

Net Income

We suffered a net loss of $5,500,107 for the nine months ended
September 30, 2012, representing a decrease of $7,687,548 (or 351.4%) from a net
income of $2,187,441 for the corresponding period in 2011. The decrease in our
net income for the nine months ended September 30, 2012 compared to the
corresponding period of 2011 was mainly due to a decrease in revenue and
increases in COGS and selling and G&A expenses and the loss on the sale and
write-off of assets, which was partially offset by an increase in other income,
as explained elsewhere in this report.

Liquidity and Capital Resources

At September 30, 2012, we had $3.6 million in cash and
equivalents on hand, compared to $2.8 million at December 31, 2011, and we had
working capital of $6.9 million at September 30, 2012 compared to $7.7 million
at December 31, 2011. The decrease in working capital is primarily due to the
use of current assets such as cash, other payables and short-term loans to
purchase non-current assets. Our principal demands for liquidity are: increasing
capacity, purchasing raw materials, sales distribution and the possible
acquisition of new subsidiaries in our industry, as well as other general
corporate purposes.

Below is a tabular summary of our cash flows for the nine
months ended September 30, 2012 and 2011 (unaudited):

2012

2011

Net cash used in provided by operating
activities

$

(1,210,590

)

$

21,869

Net cash used in investing activities

(1,737,306

)

(16,991,824

)

Net cash provided by financing activities

3,691,385

9,999,600

Effect of exchange rate changes on cash and equivalents

17,520

135,841

Net (decrease)/increase in cash and
equivalents

761,009

(6,834,514

)

Cash and cash equivalents at beginning of the period

2,831,808

8,622,035

Cash and cash equivalents at end of the
period

$

3,592,817

$

1,787,521

Operating Activities

Net cash flows used in operating activities for the nine months
ended September 30, 2012 was $1.2 million, an increase of $1.2 million, compared
to net cash flow used by operating activities of $21,869 for the corresponding
period in 2011. The increase in the use of cash in operating activities during
the nine months ended September 30, 2012, compared to the corresponding period
in 2011, was comprised primarily of a decrease in net income of $7.8 million and
adjustments as a result of changes in working capital components. The changes in
working capital components that primarily contributed to the increase in cash
flow used in operating activities for the nine months ended September 30, 2012
were a decrease in accounts receivable of $2.1 million (or 58%) and a non-cash
loss on the sale and write-off of assets of $2.1 million, which was partially
offset by an decrease in accounts payable and accrued expenses of $1.3 million
(or 174%), and a decrease in unearned revenue of $1.5 million (or 121%). The
decrease in our cash flow used in operating activities was largely due to the
decrease in our income during the nine months ended September 30, 2012 as
compared to the corresponding period in 2011.

Investing Activities

Net cash flows used in investing activities for the nine months
ended September 30, 2012 was $1.7 million, a decrease of $15.2 million, compared
to net cash flows used in investing activities of $17.0 million for the
corresponding period in 2011. During the nine months ended September 30, 2011,
we invested $1.3 million in acquiring Shimmer Sun, and $8.8 million in
purchasing property and equipment. During the nine months ended September 30,
2012, we did not acquire any subsidiary and we only used $2.1 million for the
acquisition of property and equipment. The property and equipment were purchased
for the construction of a new BOPP film production line and a fully automated
plant equipped with state-of-the-art production machinery, which commenced in
2010 and is still ongoing.

Financing Activities

Net cash provided by financing activities for the nine months
ended September 30, 2012 was $3.7 million, a decrease of $6.3 million, compared
to the corresponding period in 2011. During the nine months ended September 30,
2012 compared to the corresponding period in 2011, we decreased our net cash
provided by financing activities by repaying $20.4 million of short term loans,
an increase of $13.4 million from $7.0 million, and decreasing our proceeds from
our long term loans from $9.2 million to $1.1 million, a decrease of $8.2
million. The foregoing decrease in net cash provided by financing activities was
partially offset by our increase in proceeds from short-term loans to $23.0
million, an increase of $15.3 million from $7.8 million.

23

Assets

Our total assets as of September 30, 2012 were $75.5 million, a
decrease of $2.3 million, compared to $77.7 million as of December 31, 2011. The
decrease was primarily due to the decrease of $1.5 million in our accounts
receivable and an decrease in fixed assets of $3.4 million offset by an increase
of $0.8 million in advances to suppliers and an increase of $0.9 million in our
inventory due to higher costs of raw material. As of September 30, 2012, our
accounts receivable decreased by $1.5 million (or 2.9%) compared with December
31, 2011. We intend to continue our efforts to maintain accounts receivable at
reasonable levels in relation to our sales.

Loan Commitments

Our current liabilities increased by $2.0 million during the
nine months ended September 30, 2012, principally due to the increase in
short-term loan from $10.7 million as of December 31, 2011 to $13.4 million, an
increase of $2.6 million, which was partially offset by the decrease in accounts
payable of $0.5 million from $5.1 million to $4.6 million.

On August 2, 2010, Hainan Shiner, our wholly owned subsidiary,
entered into a credit facility with the Hainan Branch of the Bank of China. The
credit facility is comprised of a seven-year 70 million RMB, or approximately
$11.1 million, secured revolving credit facility. Hainan Shiner may not make any
draws under this facility after September 30, 2012. On each of January 24,
February 10, February 16, February 17, March 25, November 30, December 23, 2011
and March 19, 2012, Hainan Shiner made withdrawals on the credit facility of
approximately $2.5 million, $2.6 million, $2.2 million, $1.2 million, $0.4
million, $0.2 million, $0.5 million and $1.1 million, respectively. Hainan
Shiner may only use the loan proceeds to improve the technology of its BOPP film
and to purchase certain equipment necessary for these improvements. Proceeds
under the facility not used for these purposes may be subject to a
misappropriation penalty interest rate of 100% of the current interest rate on
the loan.

The initial interest rate on each withdrawal from the facility
will be the 5-year benchmark lending rate announced by the Peoples Bank of
China on the date of such withdrawal, and is subject to adjustment every 12
months based upon this benchmark. Additional interest will be paid on any
overdue loan under this credit facility of 50% of the current interest rate on
the loan. Hainan Shiner and certain of its affiliates, including the Company,
provided guarantees and certain land, buildings, and property as collateral
under this facility.

The credit facility includes financial covenants that prohibit
Hainan Shiner from making distributions to its sole shareholder if (a) its
after-tax net income for the fiscal year is zero or negative, (b) its after-tax
net income is insufficient to make up its accumulated loss for the last several
fiscal years, (c) its income before tax is not utilized in paying off the
capital, interest and expense of the lender, or (d) the income before tax is
insufficient to pay the capital, interest and expense of the lender.

During the nine months ended September 30, 2012, we paid
approximately $20.4 million of our short-term loans and borrowed an additional
$23.0 million in short-term loans. The current outstanding short-term notes
become due through February 2013. We intend to meet our liquidity requirements,
including capital expenditures related to the purchase of equipment, purchase of
raw materials, and the expansion of our business, through cash flow provided by
operations, and our current credit facility.

Obligations under Material Contracts

We have no material payment obligations other than the loan
commitments disclosed above.

Critical Accounting Policies

The preparation of financial statements in conformity with
accounting principles generally accepted in the United States requires our
management to make assumptions, estimates and judgments that affect the amounts
reported, including the notes thereto, and related disclosures of commitments
and contingencies, if any. We have identified certain accounting policies that
are significant to the preparation of our financial statements. These accounting
policies are important for an understanding of our financial condition and
results of operation. Critical accounting policies are those that are most
important to the portrayal of our financial conditions and results of operations
and require managements difficult, subjective, or complex judgment, often as a
result of the need to make estimates about the effect of matters that are
inherently uncertain and may change in subsequent periods. Certain accounting
estimates are particularly sensitive because of their significance to financial
statements and because of the possibility that future events affecting the
estimate may differ significantly from managements current judgments. There
have been no material changes to the critical accounting policies previously
disclosed in our Quarterly Report on Form 10-Q for the quarter ended September
30, 2012.

24

Recent Accounting Pronouncements

In May 2011, the FASB issued ASU 2011-04 which was issued to
provide a consistent definition of fair value (FV) and ensure that the FV
measurement and disclosure requirements are similar between U.S. GAAP and IFRS.
ASU 2011-04 changes certain FV measurement principles and enhances the
disclosure requirements particularly for Level 3 FV measurements. This guidance
is effective for us beginning on January 1, 2012. The adoption of ASU 2011-04
did not have a significant impact our consolidated financial statements.

In June 2011, the FASB issued ASU 2011-05, Presentation of
Comprehensive Income. ASU 2011-05 revises the manner in which entities
present comprehensive income in their financial statements. The new guidance
removes the presentation options in Accounting Standards Codification (ASC) 220,
Comprehensive Income, and requires entities to report components of
comprehensive income in either (1) a continuous statement of comprehensive
income or (2) two separate but consecutive statements. The ASU does not change
the items that must be reported in other comprehensive income. In December 2011,
the FASB issued ASU 2011-12 which defers the requirement in ASU 2011-05 that
companies present reclassification adjustments for each component of accumulated
other comprehensive income in both net income and other comprehensive income on
the face of the financial statements. ASU 2011-05 is effective for fiscal years
and interim reporting periods within those years beginning after December 15,
2011, with early adoption permitted. The adoption of ASU 2011-05, as amended by
ASU 2011-12, did not have a significant impact our consolidated financial
statements.

In September 2011, the FASB issued ASU 2011-08 which provides
an entity the option to first assess qualitative factors to determine whether it
is necessary to perform the current two-step test for goodwill impairment. If an
entity believes, as a result of its qualitative assessment, that it is
more-likely-than-not that the FV of a reporting unit is less than its carrying
amount, the quantitative impairment test is required. Otherwise, no further
testing is required. The revised standard is effective for us for our annual and
interim goodwill impairment tests performed for fiscal years beginning after
December 15, 2011. The adoption of ASU 2011-08 did not have a significant impact
our consolidated financial statements.

In July, 2012, the FASB issued ASU 2012-02,
Intangibles-Goodwill and Other (Topic 350) - Testing Indefinite-Lived Intangible
Assets for Impairment. The ASU provides entities with an option to first assess
qualitative factors to determine whether events or circumstances indicate that
it is more likely than not that the indefinite-lived intangible asset is
impaired. If an entity concludes that it is more than 50% likely that an
indefinite-lived intangible asset is not impaired, no further analysis is
required. However, if an entity concludes otherwise, it would be required to
determine the FV of the indefinite-lived intangible asset to measure the amount
of actual impairment, if any, as currently required under US GAAP. The ASU is
effective for annual and interim impairment tests performed for fiscal years
beginning after September 15, 2012. Early adoption is permitted. The adoption of
this pronouncement will not have a material impact on our financial
statements.

Seasonality of our Sales

The first quarter of the calendar year is typically the slowest
season of the year for us due to the Chinese New Year holiday. During this
period, accounts receivable collection tends to be very slow and we also need to
purchase raw material to prepare for upcoming busier seasons.

Off-balance sheet arrangements

As of September 30, 2012, we did not have any off-balance sheet
arrangements.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK

Not applicable.

ITEM 4.

CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in
Rule 13a-15(e) under the Exchange Act). Disclosure controls and procedures refer
to controls and other procedures designed to ensure that information required to
be disclosed in the reports we file or submit under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in the rules and forms of the SEC and that such information is accumulated and
communicated to our management, including our Chief Executive Officer and
Principal Financial Officer, as appropriate, to allow timely decisions regarding
required disclosure.

25

As required by Rule 13a-15(e), our management has carried out
an evaluation, with the participation and under the supervision of our Chief
Executive Officer, Mr. Qingtao Xing and our Interim Chief Financial Officer,
Xuezhu Xu, of the effectiveness of the design and operation of our disclosure
controls and procedures, as of September 30, 2012. Based upon, and as of the
date of this evaluation, Mr. Xing and Mr. Xu, determined that, as of September
30, 2011, and as of the date of this report, our disclosure controls and
procedures were effective.

Changes in Internal Controls over Financial
Reporting

There were no changes in our internal controls over financial
reporting during the first quarter of fiscal 2012 that have materially affected,
or are reasonably likely to materially affect our internal control over
financial reporting.

PART II. OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

From time to time, we may become involved in various lawsuits
and legal proceedings, which arise, in the ordinary course of business. However,
litigation is subject to inherent uncertainties, and an adverse result in these,
or other matters, may arise from time to time that may harm our business. We are
currently not aware of any such legal proceedings or claims that we believe will
have a material adverse affect on our business, financial condition or operating
results.

ITEM 1A.

RISK FACTORS.

There are no material changes from the risk factors previously
disclosed in Item 1A Risk Factors of our Annual Report on Form 10-K for the
year ended December 31, 2011.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND
USE OF PROCEEDS.

None.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.

OTHER INFORMATION

We have no information to disclose that was required to be in a
report on Form 8-K during the period covered by this report, but was not
reported. There have been no material changes to the procedures by which
security holders may recommend nominees to our board of directors.

Filed with this Form 10-Q for Shiner International, Inc.
Pursuant to Rule 406T of Regulation S-T, the interactive data files on
Exhibit 101 hereto are deemed not filed or part of a registration
statement or prospectus for purposes of Sections 11 or 12 of the
Securities Act of 1933, as amended, or for purposes of Section 18 of the
Securities Act of 1934, as amended, and otherwise are not subject to
liability under those sections.

26

SIGNATURES

Pursuant to the requirements of
the Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

I have reviewed this quarterly report on Form 10-Q of
Shiner International, Inc.;

2.

Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this report;

3.

Based on my knowledge, the financial statements, and
other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
report;

4.

The registrants other certifying officer and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act
Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:

a)

Designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which
this report is being prepared;

b)

Designed such internal control over financial reporting,
or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles;

c)

Evaluated the effectiveness of the registrants
disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on
such evaluation; and

d)

Disclosed in this report any change in the registrants
internal control over financial reporting that occurred during the
registrants most recent fiscal quarter (the registrants fourth fiscal
quarter in the case of an annual report) that has materially affected, or
is reasonably likely to materially affect, the registrants internal
control over financial reporting; and

5.

The registrants other certifying officer and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrants auditors and the audit committee
of the registrants board of directors (or persons performing the
equivalent functions):

a)

All significant deficiencies and material weaknesses in
the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrants ability to
record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrants internal control over financial
reporting.

I have reviewed this quarterly report on Form 10-Q of
Shiner International, Inc.;

2.

Based on my knowledge, this report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this report;

3.

Based on my knowledge, the financial statements, and
other financial information included in this report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
report;

4.

The registrants other certifying officer and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act
Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:

a)

Designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which
this report is being prepared;

b)

Designed such internal control over financial reporting,
or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles;

c)

Evaluated the effectiveness of the registrants
disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on
such evaluation; and

d)

Disclosed in this report any change in the registrants
internal control over financial reporting that occurred during the
registrants most recent fiscal quarter (the registrants fourth fiscal
quarter in the case of an annual report) that has materially affected, or
is reasonably likely to materially affect, the registrants internal
control over financial reporting; and

5.

The registrants other certifying officer and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrants auditors and the audit committee
of the registrants board of directors (or persons performing the
equivalent functions):

a)

All significant deficiencies and material weaknesses in
the design or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrants ability to
record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrants internal control over financial
reporting.

1. The Companys Quarterly Report
on Form 10-Q for the quarter ended September 30, 2012 (the Report), fully
complies with the requirements of Section 13(a) of the Securities Exchange Act
of 1934; and

2. Information contained in the
Report fairly presents, in all material respects, the financial condition and
results of operation of the Company.

IN WITNESS WHEREOF, each of the undersigned has executed this
statement this 14th day of November, 2012.

/s/
Qingtao Xing

Qingtao Xing

Chief Executive Officer

(Principal Executive Officer)

A signed original of this written statement required by Section
906 has been provided to Shiner International, Inc. and will be retained by
Shiner International, Inc. and furnished to the Securities and Exchange
Commission or its staff upon request.

The forgoing certification is being furnished to the Securities
and Exchange Commission pursuant to § 18 U.S.C. Section 1350. It is not being
filed for purposes of Section 18 of the Securities Exchange Act of 1934, as
amended, and is not to be incorporated by reference into any filing of the
Company, whether made before or after the date hereof, regardless of any general
incorporation language in such filing.

1. The Companys Quarterly Report
on Form 10-Q for the quarter ended September 30, 2012 (the Report), fully
complies with the requirements of Section 13(a) of the Securities Exchange Act
of 1934; and

2. Information contained in the
Report fairly presents, in all material respects, the financial condition and
results of operation of the Company.

IN WITNESS WHEREOF, each of the undersigned has executed this
statement this 14th day of November, 2012.

/s/
Xuezhu Xu

Xuezhu Xu

Interim Chief Financial Officer

(Principal Financial Officer and

Principal Accounting Officer)

A signed original of this written statement required by Section
906 has been provided to Shiner International, Inc. and will be retained by
Shiner International, Inc. and furnished to the Securities and Exchange
Commission or its staff upon request.

The forgoing certification is being furnished to the Securities
and Exchange Commission pursuant to § 18 U.S.C. Section 1350. It is not being
filed for purposes of Section 18 of the Securities Exchange Act of 1934, as
amended, and is not to be incorporated by reference into any filing of the
Company, whether made before or after the date hereof, regardless of any general
incorporation language in such filing.